Summary
This report compiles the status of recommendations from our 2022 financial statement audits of post-secondary institutions. It also includes a report card on each institution’s financial reporting processes and internal controls with comparative assessments from our 2021 and 2020 audits.
Preparation of Financial Statements
We issued unqualified audit opinions on the 2022 financial statements of 20 post-secondary institutions.
Post-secondary institutions are in various stages of migrating financial reporting processes and controls back from being fully remote during the COVID-19 pandemic.
Most institutions have adequate processes to promptly prepare accurate financial statements. We have found many institutions have experienced significant turnover in finance staff which has strained their ability to prepare accurate financial statements. Management and the board of governors of all institutions should regularly monitor and test that the financial reporting processes and internal controls they rely on to prepare accurate financial reporting, work as expected. Strong processes can mitigate the risk of staff turnover and improve operating efficiency and quality of data for decision making. Olds College is encouraged to continue to improve its financial reporting process.
Outstanding Recommendations
Six institutions have 10 total outstanding recommendations. Three recommendations were originally reported more than three years ago, all relating to improving testing and monitoring of the effectiveness of internal controls. The pandemic has created delays in these institutions’ implementation efforts.
New Recommendations
We issued two new recommendations to Lakeland College related to managing the risks of using cloud computing service providers. We also repeated a recommendation to Northwestern Polytechnic to improve its disaster recovery processes and physical controls over its data centres. These recommendations highlight the importance of sustaining controls and developing new processes to mitigate information and related technology risks at institutions. We also issued a new recommendation to Northwestern Polytechnic to improve the consistent application of its procurement and contracting processes. Lastly, we issued a recommendation to Bow Valley College to improve the consistent application of its financial statement preparation processes.
Implemented Recommendations
Portage College, Lakeland College and Keyano College implemented processes to monitor and test the continued effectiveness of their internal controls and processes. Medicine Hat College improved its monitoring and consistent application of its purchasing policies and processes in the current year. NorQuest College improved its processes to consistently apply its cloud computing processes related to data security and monitoring of cloud service providers.